Friday, July 31, 2015

Disappointment at Vanderbilt?

What would Cornelius Vanderbilt say?
Vanderbilt University released a study estimating the cost of complying with federal regulations. One suspects - although the university is very cautious in describing the study* - that the idea was to show how costly compliance was and to suggest, therefore, that if there was concern about tuition, the feds could be blamed. If that was the intent, the study doesn't really show that.

The study indicates that the compliance cost comes to 11% of the university's (non-medical) budget.** Note that presumably some of functions required by the feds are activities the university might do anyway so the incremental effect of federal requirements would be less than 11%. But even if we take the 11% as the incremental cost, it appears that the total can be divided into 17% of research spending and 4% of other non-research spending. So if the entire non-research amount were passed into tuition, and if tuition covered the entire operating cost (which it doesn't), tuition is around 4% higher than it otherwise would be. One assumes that the 17% is covered by the research funding that the grants provide.

Of course, none of this means that every requirement of the feds is justified and that there is no waste in compliance costs.
*The university just says "We conducted this assessment because, until now, data about the cost of complying with these regulations has largely been missing from conversations on this topic. We wanted to fully understand the role that complying with these regulations plays in the overall cost of higher education and research." See

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